emerging trends in the software industry

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7-09 © 2009 IDC Copyright 2008 IDC Michael Fauscette, Group Vice President, SBS

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The presentation is a slimmed down version of a presentation I'm delivering to a group of large financial investment executives. I take a look at the trends that are emerging out of the impact of the last two years of economic crisis and start to paint a picture of what I believe the software industry will look like going forward.

TRANSCRIPT

Page 1: Emerging trends in the Software Industry

7-09 © 2009 IDC Copyright 2008 IDC

Michael Fauscette, Group Vice President, SBS

Page 2: Emerging trends in the Software Industry

7-09 © 2009 IDC

Where We Stand

Source: Q2 & Q3 2008 Worldwide Black Books; IDC Downside Scenario Model 2

WW IT Spending

Worldwide GDP Forecast

Page 3: Emerging trends in the Software Industry

7-09 © 2009 IDC Copyright 2009 IDC. Reproduction is forbidden unless authorized. All rights reserved.

Applications Forecast Changes

0.0%

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5.0%

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8.0%

2008 2009 2010 2011 2012

2008 (Early) 2008 (Dec) 2009 (Jan) 2009 (May)

Page 4: Emerging trends in the Software Industry

7-09 © 2009 IDC

An Economic Unknown

4

$1-3 Trillion For  Bank Bailouts  Tax Cuts  Smart Grid  SMB Incentives  Health Care  Infrastructure  Broadband  Auto Manufacturers  Green Building

Page 5: Emerging trends in the Software Industry

7-09 © 2009 IDC

Software Megatrends Structural Changes Accelerated by the Financial Crisis

Consumption Models E

mer

ging

Im

pera

tives

Architecture

Sourcing a Process

Targets

Page 6: Emerging trends in the Software Industry

7-09 © 2009 IDC

Software Megatrends Structural Changes Accelerated by the Financial Crisis

Consumption Models

  Software as a Service / Cloud Applications

  Open Source Software

Page 7: Emerging trends in the Software Industry

7-09 © 2009 IDC Copyright 2009 IDC. Reproduction is forbidden unless authorized. All rights reserved.

SaaS forecast comparison

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• IDC has increased its SaaS growth projection for 2009 from 36% growth to 42% growth over 2008.

• The percentage of U.S. firms which plan to spend at least 25% of their IT budgets on SaaS applications will increase from 23% in 2008 to nearly 45% in 2010.

Source: Economic Crisis Response: Worldwide Software as a Service Forecast Update (IDC #215504, January 2009)

Page 8: Emerging trends in the Software Industry

7-09 © 2009 IDC

OSS Forecast

Source: Worldwide Open Source Software Forecast 2009 – 2013, July 2009

Page 9: Emerging trends in the Software Industry

7-09 © 2009 IDC

Software Megatrends Structural Changes Accelerated by the Financial Crisis

Em

ergi

ng

Impe

rativ

es

  Social Software Solutions

Page 10: Emerging trends in the Software Industry

7-09 © 2009 IDC

The Social Enterprise

It’s not just “tools”, it’s changing processes

and culture

Democratization and Empowerment:

Spreading control across a broad audience, adding value, building relationships, conversations and

increasing transparency

Page 11: Emerging trends in the Software Industry

7-09 © 2009 IDC

The Social Enterprise

Internal

External

Sales – Marketing – Product – Support - Service

Blogs – Communities – Social Networks - Ideasourcing – Microblogs – Syndication – Virtual Conference - Video

Wiki’s – Social Analytics – Collaboration – Mashups – Platforms -

Page 12: Emerging trends in the Software Industry

7-09 © 2009 IDC

Social Software Solutions

Consumer Apps CRM Content

Apps

Online Community Platforms

Enablers Wiki Blogs +traditional Collab

Collab

Ideasourcing Social Customer Service Social SFA (predictive selling) Brand Monitoring / building

Wiki Blogs Ideasourcing

Social Analytics

Page 13: Emerging trends in the Software Industry

7-09 © 2009 IDC

Social Software Solutions Vendors

Consumer Apps CRM Content

Apps

Online Community Platforms

Facebook LinkedIn MySpace Twitter Google Apps

SocialText Lotus Connections Sharepoint Jive Google Apps

Collab

Concursive UserVoice Oracle Sales Prospector Bright Idea Omniture

Google Apps Cisco Eos Reality Digital MyLife OneRiot Wink

Social Analytics

Page 14: Emerging trends in the Software Industry

7-09 © 2009 IDC

Software Megatrends Structural Changes Accelerated by the Financial Crisis

Architecture

  Service Oriented Architecture (SOA)

  Event Based Architecture   Unified Access to Content and Data

Page 15: Emerging trends in the Software Industry

7-09 © 2009 IDC

Software Megatrends Structural Changes Accelerated by the Financial Crisis

Sourcing a Process

  Build: Mashup, Process Modeling, Business Rules   Buy: “Good Enough” v. “Best of Breed”

  Outsource

Page 16: Emerging trends in the Software Industry

7-09 © 2009 IDC

Software Megatrends Structural Changes Accelerated by the Financial Crisis

Targets

  SMB’s   Channels   Partner to Partner

Page 17: Emerging trends in the Software Industry

7-09 © 2009 IDC

Consolidation

  Enter the Mega-ecosystem

  Partners Coalesce Around Epicenters

  Partner Consolidation

  Hybrid Business Models

Page 18: Emerging trends in the Software Industry

7-09 © 2009 IDC

The New Landscape of Tech

Mega Vendor

Acquisition Targets

Survivors

Start ups

HP, IBM, Microsoft, Oracle (Post Sun), Cisco, Intel, Google, Apple

1. Large >$1B, 2. vertical ISV’s, 3. Discontinuous innovators

Niche Markets, Redundant Portfolio, Too Unique

Discontinuous Innovators: future acquisition targets

Page 19: Emerging trends in the Software Industry

7-09 © 2009 IDC

Oracle : Sun

Key Sun Assets:  Java  Solaris  Storage

Key Opportunities:  Appliances  Storage

 Open Source

Page 20: Emerging trends in the Software Industry

7-09 © 2009 IDC

Enterprise Apps Deals Database

Enterprise Applications Deals Database: track, analyze, & summarize the buying behavior of enterprise applications deals around the world. IDC is the only research firm tracking these deals.

 4,000-5,000 deals tracked annually  Leading indicator for future purchasing

Provides an understanding of  What was purchased? Types of buyers? Which segments?  Why was it purchased?  What is happening in the field?

IDC is also planning to expand our software deal tracking across additional market areas in 2010. IDC clients are eager to understand tactical buyer data that can be used in upcoming deals.

Page 21: Emerging trends in the Software Industry

7-09 © 2009 IDC

Segmentations

 Buyer  Vendor  Partner  23 Enterprise Applications Markets (ERM,

SCM, CRM, Ops & Mfg, Engineering)  Product  8 Verticals  Employee Size  3 Regions (Americas, Asia Pacific,

EMEA)  Net New Customer vs Installed Base  Announcement Date

Page 22: Emerging trends in the Software Industry

7-09 © 2009 IDC 22

Sample Analysis From EA Deals DB SMBs remain steady buyers

Base: 4004 purchases SMB = Enterprises With Fewer Than 5,000 Employees Large = Enterprises With More Than 5,000 Employees

Page 23: Emerging trends in the Software Industry

7-09 © 2009 IDC 23

Sample Analysis From EA Deals DB (Cont.) Net new customers become scarce

Base: 4004 purchases

Page 24: Emerging trends in the Software Industry

7-09 © 2009 IDC 24

Sample Analysis From EA Deals DB (Cont.) Verticals that see growth from Q to Q

Page 25: Emerging trends in the Software Industry

7-09 © 2009 IDC © 2008 IDC

Michael Fauscette [email protected] Twitter: @mfauscette Blog: www.mfauscette.com

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